Now, The New York Times is reporting today that overall ad spending losses narrowed in the fourth quarter vs. earlier quarters last year. "Spending in the United States fell 12.3% in 2009 compared with 2008, according to figures to be released on Wednesday morning by Kantar Media,'' the NYT says. "The fourth quarter fell 6% compared with the same period the previous year — a marked improvement from declines of 14.2% in the first quarter, 13.9% in the second quarter and 15.3% in the third quarter."That rosier outlook was part of the reason Dickey announced there would be no furloughs in the second quarter, and no plans for newspaper division-wide layoffs in the near future. Investors appeared to rally around the news: Gannett's stock recently traded for $16.62, up 1.3% from yesterday, when shares closed at $16.42, up 2.2%.
Whoa. Before we party on, note that is a 12 percent DECLINE. It is not as bad as it was, but it is bad.
ReplyDeleteAlso, isn't the fourth quarter historically the best with Christmas and all? Is this really good news or is this the kind of thing you trumpet when you want things to look better than they actually are? We are looking at a 6% decline from a year (2008) that was already declared miserable. Seems to me the news is: Things are getting even worse but the rate of decline has slowed slightly.
ReplyDeleteBeware the double-dip. Some economists like Nouriel Roubini say we are on the verge of returning into the recession. If we go back into recession, these (allegedly) rosy ad figures will collapse again.
ReplyDeleteExcept that 12.3% decline is versus 2008. I'm very interested to see what 1Q 2010 looks like. I believe it will be up non-trivially vs 1Q 2009. We should get a read on that on Thursday.
ReplyDelete12:29 -- I think you're absolutely right. The Q1 figures are what matters. Celebrating an decreased decline is ludicrous because it's still a decline. And, at some point, declines have to get smaller -- either that or you simply go out of business.
ReplyDeleteIf we see a gain in Q1, that means something, as it would be a sign of mild recovery.
As for economists worrying that we could slip back into the recession, that just shows how out of touch they are. By most people's standards, we were fully into a recession a year before most economists decided to call it that. And saying that we might slip back into one assumes that we have recovered. I doubt the record numbers of unemployed and the states that are looking at cutting basic services because they don't have the tax money to fund them think we're out of the recession.
The only thing that has show mild improvement is the stock market. I do believe we're at a tipping point but its not between the brink of recovery and another recession. We're on the brink of a continued recession and a full-fledged depression.
I am not saying he's right this time, but Roubini was one of those forecasting the collapse we've seen. Look it up. He's an economist at NYU and has no investments other than a 401K. We need to learn to listen to negative voices and alternative voices after what happened with this housing price collapse.
ReplyDeleteThere is nothing but negative waves out there. The March circulation report is being compiled now, and I bet it is a real bummer for the community newspapers. Ad revenue depends on circulation, so it won't be a help for Q1. I don't see any sign of a bounce-back. In fact, advertisers have gotten used to not advertising, so it is going to be a real bitch to get them back.
ReplyDeleteI would look for Q1 to be quite positive, and if the declines moderate or flatten, 2 and 3 will be OK as well. But the last quarter will be the one to watch. They'll have cycled the effect of the massive cuts, and if revenues are still declining at all at that point, that's when you could expect the bloodletting to start all over again.
ReplyDeleteAlso, I think there will be some significant return of ad dollars to print, as advertisers figure out they are not getting response on the web. Doesn't matter if the ads are free if they are not generating revenue, and Pew just said that 79% of visitors to news organization websites don't click through on the ads.
ReplyDeleteAt some point advertisers are going to need to drive customers back into their businesses, and print did a pretty good job for them when the product was even half decent.
Online ads are a pain. I have yet to meet anyone who thinks differently.
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ReplyDeleteWell, there will be 6 weeks of political foofarall in 2010 4Q that wasn't there for 4Q 2009. That mostly helps the TV stations, but not exclusively.
Personally, I've been in GCI heavily since March, with some relatively nicely timed in-and-outs (out at $14, back in at $10, like that), and looking to bail for good somewhere in the $20-23 range, which I think is doable by mid-July. Past that price range, it's back to looking at GCI as a long-term investment rather than a short/mid-term speculation.
The announcement comes as no surprise to this ex-Gannett employee. There is no one left to furlough! The building is a ghost town. And instead of furlough's they have found a way around the furlough by terminating employees to avoid severance packs, etc. The sad news is that every employee is looking for another job. The majority of business owners and former subscribers are disgusted with the "Capital City" Newspaper. The numbers are made to look good by decreasing work force of higher paid employees to bring in new employees at a lower cost of pay. This has not worked so far as the newspaper has had 8-15 job openings at one given time posted for almost a year. Gannett used to be the company that many professionals sought to work for but not anymore. It is all about the Top CEO's pocketbook. God Bless.
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